What we need to recognize today is the ‘nature’ of our financial system and why a ‘digital’ (computer based) system is all about centralized manipulation of our ‘prices’ (especially of key commodities). There is a huge difference between a metal coin system from which we started in 1792 to our digital currency system of today. There is also a huge difference between a paper note system and our digitized computer system of today. The HUGE difference is the ‘nature’ of the system. Coins and Paper are units which are OUTSIDE my/your Consciousness. We can observe a coin and a paper note and also HOLD these units in our HAND. I would call this an OPEN financial system in that the coin and the paper note is ‘outside’ of my/your MIND. This, however, is not the situation with DIGITAL currencies. Today, some 96% of all financial transactions (in our Western World) utilize ‘digital’ units for their financial decisions! Why has this led to a CLOSED financial system and ubiquitous manipulation of prices?
Computer Digits (now our currency) enters a Closed System (the computer screen) via typing! Who has the Authority to create our Currency merely by typing numbers into the computer? Why does this lead to Manipulation of prices, interest rates, and values?
Since most financial transactions today are digitized (computer based) transactions. This means that DIGITS are the units we use for buying, selling, lending, investing, and speculating. What are DIGITS (within our computer screens)? Are they similar to coins and paper notes? Personally, I don’t think so! Digits are VIRTUAL units within CYBERSPACE. If you look at your Smart Phone or Laptop (right now) you should notice that you are currently reading ‘digits’ or ‘words’ on your computer screen. How should we view these ‘digits’ and ‘words’ when we think of our CURRENCIES? Are these ‘digits’ in the same realm of reality as historical COINS and PAPER NOTES? I would suggest, NO! Digits are within a CLOSED system which we call CYBERSPACE. Who has the authority to increase our currency ‘digits’ within this CLOSED space? Why does this centralization of financial transactions lead to market manipulation?
Who understands the ‘nature’ of Cyberspace? Why is it much different from Observed Space (that which is ‘outside’ our Consciousness)? Why is our financial system now mostly within Cyberspace? Why is this a CLOSED system for all market participants (except the Central Authorities)?
Can you or I spontaneously increase our own ‘digital’ accounts at our commercial bank (say our checking or savings accounts)? Can you or I create QE dollars (like our Fed does) to increase our personal financial accounts? I don’t think so! The only authorities today who can increase their computer/digitized financial accounts by a decision are our Central Banks and select Commercial Banks who are members of our CLOSED financial System. A Central Bank, like our Fed, can ‘type’ into their computer financial account new DIGITS (call these digits…dollars, euros, yen, etc.) and then manipulate other financial assets with these newly created digital units. Can you discern the CLOSED nature of this financial system today? Digits are circulated from computer screen to computer screen as new digits enter this CLOSED financial system!
This is an example of a closed financial system. Who can enter the computer screen (physically) for their ‘money’? Why does this type of financial system lead to manipulation of prices, etc.?
What our new closed system allows today is for Central Authorities (via their policy decisions) to MANIPULATE digits (interest rates and prices) via select TRADING strategies. Have you noticed how the ‘prices’ of silver and gold have been manipulated these past few years? How many additional goods and products (say energy and farm products) are also manipulated by select Central Authorities? Are you aware that our own Fed has a large trading room at the New York Federal Reserve Bank, 33 Liberty Street, which consists of some 50-60 traders? This trading room is supposedly on the 9th floor of the NY Fed and it is mostly unnoticed by our traders in our global marketplace. What is the function and purpose of this large trading room? What is being traded and what prices are being manipulated by select trading strategies? Why would this type of trading room be needed to manage the System Open Market Account (called the SOMA)? The SOMA could be sustained (or managed) with only one computer (not a whole trading room of computers)! So what are all the additional traders trading? Where do their trading ‘digits’ (called dollars) derive from?
A partial view of the Trading Room (9th floor) at the New York Fed, 33 Liberty Street, New York. What is their mission and why the lack of any transparency?
The entire operation at our New York Fed seems mysterious and suspiciously un-American. Why can not any major media outlet expose this trading room operation and those doing the manipulations? Check out http://www.newyorkfed.org/ and see if you can find any details about this trading room operation. Check out the chief authority who sets policy for this trading room. His name is William C Dudley, CEO and also the Vice Chairman of our Federal Open Market Committee (the committee that makes all our QE and monetary policy). What policies and trading strategies is he implementing on the 9th floor of this building and what prices and digits are being manipulated (when, where, how, what, and why)? While checking out the trading room at the New York Fed you might also check out the trading rooms which are operating on behalf of the BIS (Bank for International Settlements).
Who is William C Dudley? What is his Authority? Notice the trading room he oversees? What are all these traders doing and what are they trading? What is their mission and goal? What strategies are being used to affect (influence) market prices and values?
It appears from my personal research that the BIS (http://www.bis.org/) also has TWO trading rooms within their control. Two (interlinked) trading rooms located in Basel, Switzerland and another in Hong Kong. What are these secret trading facilities doing and trading? According to their website they have a Markets Committee (formerly the Committee on Gold and Foreign Exchange). Some 21 Central Bankers meet regularly to exchange views on market issues and other developments (beyond gold and foreign exchange). Our New York Fed (represented by William C Dudley) is one of the participants on the Committee. William C Dudley is also the Chair for the Global Financial System Committee (a committee which monitors the broad issues relating to financial markets and systems). Who knows anything about this key financial policymaker who administers much of our American financial policy and also much of our Global financial policies? Do any of our elected representatives know about his doings and policies? If not, Why?
Does anyone understand what this unelected authority does and why? He has the powerful position of Vice Chairman of the FOMC. He is also active with the Bank for International Settlements (BIS). Whose policies and trading strategies is he implementing? Does anyone really know?
Shouldn’t our representatives within our Congress and the White House have some input into all these key financial manipulations which are now ubiquitous within our CLOSED computerized/digitized financial system? Why can a few select trading rooms operate without any TRANSPARENCY and then MANIPULATE (via the computer) select PRICES in our now Global Marketplace (independently from the electoral process)? Does any of this make any sense (assuming the general philosophy of Capitalism as our principal guide)? Why should just a select group of interconnected authorities have all this POWER over our marketplace? What is their goal and objective? Does anyone understand the emerging POWER now developing within the BIS (the Central Bank for some 60 global Central Banks)? What is their mission and goal for our planet? Why no transparency?
Some 60 Central Banks are part of the BIS. What is their mission and why the lack of transparency? Is our planet now controlled and administered by some 60 Central Bankers (operating within a CLOSED financial computerized system)? Why trading rooms in Basel and Hong Kong? What do they trade and why? From what sources do they obtain their funds for trading and for their manipulations?
Do we currently have Capitalism today (as our philosophical system)? I think that we need to gain some understanding about who is controlling our Globalized Financial System (now computerized/digitized and CLOSED to the general market participants). Give this missive some deep thought at your leisure! Have a good DAY! I am: http://kingdomecon.wordpress.com/
I am proposing a NEW Model of Reality! Let’s talk about how I (we) live our lives on this planet. Let’s think about how we all make our decisions in our global marketplace. If we ‘fry’ up all the eggs on our planet (say for breakfast), then what is our ongoing problem? Don’t we need the whole ‘chicken’ for the production of new ‘eggs’? How can ‘eggs’ emerge without there first being a CHICKEN? The chicken and egg conundrum has been part of philosophy for most of our history. The entire theory of macro-evolution is based upon the idea of a ‘past’ and the idea that the ‘part’ comes before the ‘whole’. Let’s explore what is reality and why this education (called Macro-evolution) is mostly deception (fanciful imagination)! This missive also applies to concepts like ‘money’!
If NOW (this moment) is reality, then the Chicken comes prior to the egg!
What is ‘time’? Why is the concept of ‘past’ a NOW memory (and NOT a ‘thing’ which exists independently) ! Reality is always a NOW experience from birth to death!
Our Western science likes to propose that the ‘past’ is real (it exists) and that human beings have evolved from the part to the whole (inorganic matter to a living cell). Science also proposes that conscious life emerged from non-life (contrary to all our experience on this planet). Is any of this reality as we live it? Has mankind experienced millions and billions of years on this planet? Is any of this reality or is it myth? Let’s think about the concept of ‘time’ and the ‘past’. If ‘time’ is a concept of CONSCIOUSNESS…and consciousness started with civilized man (say the Sumerian civilization) around 4000 B.C. then would not ‘time’ start with a conscious decision derived from conscious man? What meaning would ‘time’ and the ‘past’ have if there were no CONSCIOUS beings on the planet? Think about this!
As I (we) move in space (earth spins and revolves) seasons change! Time emerges from this change! Time was probably invented by the Sumerians and/or the Egyptians to create order! Time (for conscious human beings) is always a NOW experience! There is no ‘past’ or ‘future’!
First of all, I (we) live our lives continually in the NOW moment. Life is lived as ‘successive moments of now’ (always). In reality there is no such thing as the PAST. Think about this! The idea of a PAST is a deception! In reality, we always live our lives in the PRESENT moment (also called ‘today’, or ‘now’). So what is this idea of a PAST? This idea really emerges from our NOW memories. It is my MEMORY (within each moment of NOW) in which a PAST is visualized (and conceptualized). In reality, however, I live my life in the NOW (continually) but I also have a memory within the ‘now’ which produces the idea of a PAST. Our education on the concept of TIME is also mostly a deception. Let’s think about this concept that we call TIME! Why are concepts like ‘past’ and ‘future’ a deception of our subjective CONSCIOUSNESS!
The idea of ‘time’ emerged from watching the movement of our planet (and our bodies) in relation to outer objects (like stars and our Sun). In other words, MOTION gives us a conception (deception) of TIME. Motion, however, is NOT ‘time’. Motion is motion and all is relative to other objects within my consciousness. I conclude (deduce) that there is MOTION from observing the Sun passing over the horizon from east to west. I then ‘invent’ (subsequently) the idea of TIME from this motion. Later I can call this ‘motion’ by the name DAY. Day 1, day 2, day 3, etc. So what is TIME really? In reality, I would suggest that ‘time’ is merely a deception (or conception) of MOTION in space. Units of ‘motion’ allows me to conceptualize ‘change’…and this ‘change’ can be conceptualized as TIME. In reality, however, there is NO SUCH THING as ‘time’ within our outer Universe. Time, in reality, is totally internal and totally within my/your CONSCIOUSNESS! What does this mean for us as we LIVE our lives on this planet? Let’s explore!
Motion creates the ‘illusion’ of time! Time, however, is imaginary (an internal concept)! Time is within our Consciousness! Time is not some ‘thing’ which we can discover scientifically!
My ‘motion’ around our Sun is NOT ‘time’! Motion and Time are not the same! Time derives from my Consciousness whereas Motion is outside my Consciousness! Note the difference!
What this means is that there is really ‘no’ PAST and there is ‘no’ such ‘thing’ as TIME (existing within our outer Universe). In reality, I (you) live our lives as ‘successive’ moments of NOW (always)…from morning until the next morning and from day-to-day! The idea of a YESTERDAY or a PAST is really a deception of our conscious MIND! We live our lives in the NOW and/or the PRESENT MOMENT and/or TODAY…ALWAYS. Think about this reality! We experience life as successive moments of ‘today’ (now)!
Our Consciousness produces the reality of the ‘present moment’ (continually) as our experience of reality! Try to escape the ‘present moment’! I can not!
Our lives are like the concept of ‘real-time’! Today, we witness our ability to communicate in REAL-TIME…24/7. We can communicate using our Smart Phones from New York to Tokyo, from San Francisco to London, or from the Arctic to the Antarctic. Our speed of light communication (via our electro-magnetic spectrum) is equivalent to living in the NOW continually (bodily and also consciously)! The concept called REAL-TIME is similar to NOW TIME! Our world is now a world of real-time and global (instantaneous) communication! Our monetary system is a good example of this reality! We can trade via our computers 24/7 today!
NOW is always the ‘time’ (within our Consciousness)! We live our lives in the NOW (continually)!
As I type this missive I am typing continuously in the Now Moment. When I think about a prior moment, I always THINK in the Now Moment (about the prior moment). There is no ‘past’ or ‘future’ within our Now Consciousness! Consciousness is always an experience of the Now…the Present Moment…or the Today Moment! TIME (past and future) has been a deception of our MINDS. Life is lived in the present, now, or today (always and continually)! When we trade, invest, lend, borrow, or make monetary decisions we do so in the present. Our thinking about some future speculation is done within the present moment. Concepts like the ‘time value of money’ have no real meaning today! Who can live in the ‘past’ or the ‘future’? Who can discern what is imaginary and within each subjective mind? Why do we now need to THINK differently in our global internet AGE!
From birth to death human beings live (consciously) in the Now Moment (always)! Give this some reflection! Consciousness is not a ‘thing’! Consciousness is a Now Experience (continually)!
People come before Money and the Chicken comes before the egg. People invent Money to solve the riddle of Value (another subjective and internal concept of our conscious Mind). Since my birth in 1943, I have lived my life continually in the NOW. That which we call the PAST is really nothing but a subjective visualization of a prior event (a memory). The prior event was a Now Event at the moment it was experienced. My memory of a prior event is also a Now Experience (always). Who can escape the Now Moment? Who can Live (bodily) in the Past? Who can live (bodily) in the Future? I would suggest NO ONE! If I live in the present moment (continually), then I would suggest that you do likewise! Think about the reality of HOW we LIVE our LIVES (consciously)! My answer is: Successive Moments of Now (always and continually)! Give this philosophy some attention and consideration!
People ‘invent’ Money and Money creates Bubbles! Human Nature is slow to Change! What we now need is a NEW Model of reality based on the reality of: successive moments of Now!
To conclude this missive, I would suggest that the Chicken does really come prior to the egg (for those who live in the NOW). People come prior to Money (when we think about its origin). Today, we need to view our World as a ‘whole’ entity (the entire planet). The ‘part’ (a single nation/state) does not encompass the Whole (our planet). We need to SEE our planet as the home for ALL its 7 billion inhabitants (one family). Natural Resources must now be shared! People must come prior to Money and Material objects! Consciousness must be viewed as prior to the body/brain! I am not my body/brain and I would suggest that you are also similar!
My brain is activated by ‘consciousness’! What is ‘consciousness’? I/you ARE consciousness! Consciousness is not a ‘thing’ (which exists per science). Consciousness is metaphysical!
We now need a NEW SYSTEM or MODEL for our planet with new principles and new conceptions of reality! What is now emerging is a real-time marketplace for everyone! Reality is NOW and Successive Moments of Now! Historical Capitalism is mostly over! The ‘time value of money’ is mostly over! The Keynesian Model of economic reality is mostly over! Give these concepts some reflection at your leisure. Enjoy! I am: http://kingdomecon.wordpress.com/
Today, the virtual currency called Bitcoin dropped to $150 on the Mt. Gox exchange. Recently, Bitcoin was as high as $1200. At the end of January it was at $939. What does this reveal about ‘virtual currencies? What does this reveal about our ‘virtual’ currency called the ‘dollar’? What does this reveal about all our virtual currencies (yen, pound, euro, yuan, krona, peso, etc.)? Today, we have some 150 virtual currencies ‘floating’ within our digitized computer screens. Most monetary transactions in the Western world are now accomplished via our virtual fiat currencies. Historical MONEY (silver/gold) has mostly disappeared from our markets. Trading, investing, saving, speculating, lending, and borrowing are now accomplished via the globalized computer trading network which we witness within our real-time computer screens. All these currencies are now mostly Virtual!
Bitcoin is transferred from mobile device to computer (back and forth) and can work as a medium of exchange for certain transactions. The unit, however, is virtual and works only within the computer environment! It’s viability as a substitute for real physical MONEY is limited!
Practically all of our stock and futures exchanges are now electronic exchanges. All of our global currencies (our FX markets) are now traded via the computer. Our FX markets are now trading some $5.3 trillion of virtual currencies daily. The new concept within these markets is the concept of ‘pips’. Trading ‘pips’ to accumulate cash is the goal of most FX traders. Our world of money is now mostly within our consciousness and our extended consciousness (the computer screen). Virtual reality and cyberspace have replaced our historical markets of open out-cry/paper exchanges. Live human traders in the trading pit exchanging paper contracts are now obsolete. Today, all is trending towards electronic transactions (HFT and Algorithmic trading) and speed of light frequencies for the transmission of financial data. What a change from ‘yesterday’!
My personal sense is that Bitcoin is a precursor to an eventual digital currency for our planet. Bitcoin has captured the imagination of a vast audience of financial pundits and media personnel. The experiment with Bitcoin is touted as a free market currency, decentralized, and independent of all our Central Banks and their manipulations. You can witness a video on the history of Bitcoin and why many desire that a similar virtual currency replace all our existing paper currencies. Click here: http://www.youtube.com/watch?v=PPM3OKFYH-o. Thomas Edison supposedly invented a renegade currency which would replace our historical paper dollar. Today, many view Bitcoin as similar (in concept) to the renegade currency originally invented by Thomas Edison. Watch the video, it does cover the issues of money and many other issues related to money. What, however, is the problem with all these virtual currencies?
Our American Dollar is similar to Bitcoin…both are ‘virtual’ currencies! If in doubt, ask Ben Bernanke!
To understand why Bitcoin or any other virtual currency can not work to promote Capitalism we need to understand some basics about money and its role within Capitalism. The major function of money is to serve as a proxy for ‘value’. The subjective concept of ‘value’ and the ‘measurement’ of value is why money was invented in the first place. A virtual currency can not serve this core function. Bitcoin, for example, has no intrinsic value. It has no lasting ‘store’ of value…and it has no physical existence. The only functions which Bitcoin (or any other virtual currency) can serve is as a ‘medium of exchange’and as a ‘unit of account’. All virtual currencies are metaphysical in nature (subjective units of consciousness). This limits these currencies when it comes to measuring ‘value’, storing ‘value’, or creating stable ‘prices’. As long as we have money (gold/silver) in our markets, these elements will prevail as ‘stores’ of value!
Money emerged from barter…its purpose was to measure (derive) VALUE! Virtual currencies can not work as proxies for measuring ‘value’. Price and Value are not the same!
Notice the huge volatility already experienced within the Bitcoin environment. The coin (an image within our computer screen) started at mostly a 1:1 ratio with the dollar. It then has fluctuated in relation to the dollar (via huge fluctuations) and is currently exchanged at $150. This type of volatility makes it useless for creating stable prices within any market.
This chart shows the volatility of Bitcoin as compared to the Dollar/Euro. Can this work as a viable currency? Remember, the purpose of money is to measure ‘value’ and create ‘stable’ prices!
We can conclude this missive with the message that Virtual Currencies can only work for a limited time period. If our elite authorities want to create a single global virtual currency (administered from Basel, Switzerland or similar) it might work for a few years at most. Since virtual currencies are subjective and imaginary in nature, however, these units have huge limitations for advancing Capitalism. The purpose of Capitalism is to increase material WEALTH and advance PROSPERITY for the planet. A virtual currency disappears when the computer is not functioning. A virtual currency operates only within the closed system of cyberspace. And a virtual currency would not work within a BARTER environment! Retain your silver/gold coins for potential barter exchanges down the road!
Money evolved (within a Barter environment) to solve the riddle of VALUE (in exchange)!
Beaver skins worked as MONEY because traders viewed these skins as containing VALUE!
Bananas, chickens, smart phones can work as MONEY if people view these items as containing VALUE!
There is no objective reality, however, to a virtual currency…nor can these units serve to objectively measure, calculate, or derive stable values and prices for our goods and services. This means that virtual currencies can not work for any extended period of time. My sense is that Bitcoin is much like the tulip mania of the 1600′s. It has appeal at the moment (to some), but its lasting appeal will vanish when people recognize it real nature (its metaphysical and appears only within the computer screen)! Capitalism is based upon physical MONEY (items derived from a BARTER environment). Who in their right mind would choose an ‘imaginary’ item for exchanging VALUE when bartering goods? Items of physical FOOD would be much superior! Enjoy! I am: http://kingdomecon.wordpress.com/
Tomorrow the G-20 Finance ministers and Central bankers will meet in Sydney, Australia to coordinate macro-economic policy for our planet. Janet Yellen and Jacob Lew will represent the United States during this two day meeting of the elite. The G-20 consists of the new group of world leaders who will likely govern our planet in the coming months and years (during our transition to a New World Order). The G-20 Summit was created as a response both to the financial crisis of 2007–2010 and to a growing recognition that key emerging countries were not adequately included in the core of global economic discussion and governance. The G-20 Summits of heads of state and government were held in addition to the G-20 Meetings of Finance Ministers and Central Bank Governors, who continued to meet to prepare the leaders’ summit and implement their decisions. You can visit the G-20 website at: https://www.g20.org/.
The location for 2014 G-20 Finance and Central Bankers meeting, Sydney, Australia!
In addition to the 20 top Political Leaders (making up some 85% of global GNP) we now have the 20 top Central Bankers (from these elite nations) also meeting to create our New World Order and Global Governance for our planet. All this has emerged since the financial crisis of 2008. Recently, the concept of 20 elite nations has expanded to include such new groups as the C-20 (promoting civil society goals), the B-20 (reforming global business institutions), L-20 (coordinating labor and global trade unions), T-20 (academic ‘think tanks’ who desire global governance and global economic institutions), and the Y-20 (a forum of the young leaders who buy into the G-20 program and global governance). A great overview of the emerging concepts of Global Governance can be viewed at: http://y20australia.com/video/welcome-message-chair-y20-planning-group. This young lady has the jargon and charisma…which might create followers for a New World Order for our planet. Watch!
Young Ambassadors Society for Global Governance (http://www.youngambassadorssociety.org/)!
It is obvious, to me, that the trend towards a New World Order and Global Governance is now well entrenched (among the world leaders and those who rule our International Institutions). Some 500 delegates will meet in Sydney tomorrow and Sunday and then another 4000 delegates will meet in Brisbane in November for the key political decisions of the G-20. The G-20 is our new Global Governance Group which will likely make decisions and policies which will lead our world into some form of Centrally Controlled Political and Monetary System and a Global Digital Currency (after the coming market collapse and deflationary depression which is now emerging rapidly). All the major global institutions now have bought into the agenda of the G-20 and their elite leaders (the IMF, WB, WTO, FSB, UN, BIS, ECU, etc.). Socialism is emerging rapidly for our planet and we soon may have a small group of elite ruling over the entire planet and the 7 billion slaves (citizens). It’s all happening right on schedule and in front of our eyes!
Rulership (Global Governance) could center in Basel, Switzerland as this is the location of the BIS and the FSB!
Can a select elite really RULE our planet? Is this DREAM realistic?
Another powerful institution which has recently (2009) emerged with Global Governance on their agenda is the Financial Stability Board. The FSB represents the G-20 leaders’ first major international institutional innovation. Secretary of the U.S. Treasury, Tim Geithner, has described it as “in effect, a fourth pillar” of the architecture of global economic governance. The FSB has been assigned a number of important tasks, working alongside the IMF, World Bank, and WTO. Chairman of the board is the Canadian Mark Carney, Governor of the Bank of England. . See: http://en.wikipedia.org/wiki/Financial_Stability_Board (for details about the FSB and the membership). For details about this new and powerful entity you can also visit their website at: http://www.financialstabilityboard.org/.
The Financial Stability Board could lead to a Global Centralized Financial System in near future!
Governor of Bank of England (Mark Carney) is current Chairman of the Financial Stability Board!
Will anyone of us slaves (the 7 billion global citizens) have a chance to VOTE on any of these new institutions and plans which are now planned for us and our planet? I would suggest, NO! We are not part of the elite who rule this planet. We do not control the MONEY or the POLITICAL decision-making for this planet. We are the ruled…not the rulers! Those with big brains must rule us as they know what is best for us. We must adopt and follow the agenda as it is created and implemented! Let’s meet just a few of our Global Rulers and get to know their images.
The G-20 (you can update the images after the coming Summit in Brisbane in November 2014)!
G-20 Finance Ministers and Central Bankers who control the money on our planet!
G-20 policy-makers who create our rules, laws, and regulations!
Well known Central Bankers (Japan, ECB, USA)!
The BIS (Bank for International Settlements), Basel, Switzerland (location of FSB and Global Finance)!
All the trends are now leading to a New World Order and Global Governance for our planet. This will likely be imposed upon the citizens of this planet in the near future. A form of democracy may be allowed AFTER the system is installed by the elite. A Global digital currency will likely be the ‘glue’ which holds the system together and forces all planetary citizens to use this currency for their economic survival. Digitization of all currencies are now mostly complete and mobile electronic devices are now ubiquitous globally. A trend in motion is likely to continue…until it ends! Personally, I don’t think that select elites, operating within select power centers, can make this type of system work for our planet. I do sense that the elite will attempt to force this system upon mankind, however. Watch and then make your own decision! Enjoy! I am:
A good way to understand the changes which have occurred to our political/monetary regime is to view a timeline of key events. As a teacher of monetary history, I find that a timeline does help me remember why events have changed and then how these changes affect our current situation. Change has been continual and exponential. Let’s start with the founding of our country and then bring events up to our present situation. I think this timeline will help us discern what has happened and where we find ourselves today! Following is a brief summary which may help us understand why events today are so chaotic and volatile:
Our World has changed but our philosophical System has remained the same. Can this continue indefinitely? What is likely to replace our current System called Free Market Capitalism?
1775 – 1781: American revolutionary period and the reign of the Continental currency unit. The Continental currency was a paper fiat currency which totally collapsed after six years in circulation. ‘Not worth a Continental’ became the motto after the collapse.
1785: Thomas Jefferson among others chose the ‘name’ for a new American currency unit. The ‘name’ chosen was the American ‘Dollar’. What is a ‘Dollar’, however?
1792: Congress passed the Coinage Act of 1792 which defined our new currency unit. The definition of our Dollar became 371.25 grains of silver. Silver and gold were viewed as our Money and the Dollar became our official Currency. Article I, Section 8 declared that Congress would coin our Money and regulate the Value thereof. Value is regulated via a definition for our Dollar in terms of the chosen Money item (initially silver). Gold also became official (secondarily) and our gold Dollar was defined as 24.75 grains of gold. The Silver/Gold ratio at the time was 15 to 1.
1873: Congress officially declared that our Dollar should be defined in terms of Gold (rather than silver). Our Dollar was officially defined as 23.22 grains of gold. One ounce of gold would equal $20.67. Silver was dropped as the official definition of our Dollar. Silver continued as legal tender and also Money, however. Gold became the reference point for our Currency from 1873 on.
1913: Congress passed the Federal Reserve Act on December 23, 1913. This Act changed our monetary system from a Decentralized market system to a Centralized banking system. The FED was allowed complete independence from our Congress (and Article I, Section 8 of our Constitution). Many viewed this Act as unconstitutional yet the Act was signed by our then President, Woodrow Wilson, and it became the Law of the Land. A new Currency called the Federal Reserve Note emerged after the creation of this Centralized entity (also called the 4th branch of our Government by many).
1933: Under the Franklin D. Roosevelt administration, gold ownership was prohibited (for Americans) and our Dollar was redefined (devalued) to 13.71 grains of gold (a 40% devaluation). Also, under the FDR administration, our Treasury collected all the physical gold from American citizens (1933) and also purchased substantial supplies of gold from foreigners (after 1933) at the new definition of $35 for each ounce of gold. By 1944 our Treasury had some 740 million ounces of gold in storage at Fort Knox (some 70% of the world’s official supply). Gold confiscation (1933) was viewed as necessary to get our economy back on a positive trajectory (now with a paper fiat currency system in control)!
1944: A new international conference was held at the Mount Washington Hotel, Bretton Woods, New Hampshire. Some 44 allied nations attended (730 delegates). The architect’s of this new international currency regime were John Maynard Keynes (Great Britain) and Harry Dexter White (United States). The outcome of this conference was a declaration that the American Dollar would be the World’s Reserve Currency and all international currencies would be ‘tied’ to the American Dollar. To make the Dollar viable for international acceptance, the Dollar was defined as 13.71 grains of gold ($35/ounce of gold) and would also be ‘convertible’ (by foreign Central Banks) into our gold at the defined numbers. This Agreement at Bretton Woods essentially made our Dollar as GOOD as GOLD and acceptable for settlement of all international trade relations (settlement of trade accounts).
1971: From 1944 on the American Dollar was viable for settlement of all trade accounts and also the Reserve Currency for the World. On August 15, 1971, however, our then President, Richard M. Nixon, became aware that our gold supply (which was 740 million ounces in 1944) had declined to some 272 million ounces (a 60% decline). America’s mis-management of the Dollar (mostly under Kennedy, Johnson, and Nixon administrations) provided foreigners the option to exchange excess dollars (accumulated within their reserve accounts) into our gold supply (at $35/ounce). The trend was considered serious and this resulted in Nixon closing the Gold Window (to foreigners). The result of this decision created a new ‘Floating Currency Regime’ for the entire international community. Metaphysical currencies (globally) became the norm for settlement of all trade and international accounts.
1973: The breakdown in the Bretton Woods System and the closing of the Gold Window allowed a new index currency regime to emerge. The American Dollar became a weight average of some six international hard currencies (called the index dollar). All international fiat currencies became ‘floating’ mathematical numbers which were subjectively ‘valued’ against each other and against the new American Index Dollar. All ‘valuations’ became relative and changing from day-to-day. Gold was removed as official legal tender (internationally) and also as a settlement money for international reserve accounts. The American Dollar continued to hold its status as the World’s Reserve Currency and final settlement currency for all international trade accounts.
1975: All the OPEC nations agreed to ‘price’ their oil with the American Dollar creating what is called the Petro-dollar. This control over ‘price’ (using the Dollar) was initially negotiated by America’s Secretary of State, Henry Kissinger, in 1973 with the Saudi Government. In 1975 all the OPEC nations agreed to ‘price’ their oil in Dollars (allowing the Dollar to remain the World’s most important Reserve Currency and Pricing Unit). Oil and energy became the reference point which gave the American Dollar creditability after the closing of the Gold Window in 1971. Without this agreement between OPEC and the United States, it would have been unlikely that the American Dollar would have lasted as a World Reserve Currency. Congress approved Gold ownership for all Americans again (this option had been closed since 1933).
1970′s and after: The trend towards Debt and Credit expanded exponentially. Americans started to receive Credit Cards and official encouragement to spend now and pay later. Debt started to accumulate as Americans borrowed, spent, and increased their outstanding Debt. America’s mindset of spending and accumulating debt continued with new mortgage debt, consumer debt, student loan debt, and credit card debt. Our National, State, and Local Governments expanded their empires via new spending, borrowing, and accumulation of new public debt. Today, Americans have record debt (now mostly unpayable) and our National Government has record debt (also mostly unpayable). See this website for the details: www.usdebtclock.org.
1980′s – 90′s and after: The new technology called the computer emerged with a bang for Americans and the World community in the 1980′s. Gradually (since the late 80′s), all financial instruments and currencies have been converted into Digital instruments (digitization and virtualization of paper documents). A World Wide Web emerged (called the Internet) in the 80′s and 90′s. This international communication system expanded as most communication was converted to speed of light digitization (2000 and after). The underwater submarine fiber optic cable system was mostly completed in 2010, allowing further expansion of global mobile devices for real-time communication and information flows. This computerization (and digitization) of all paper documents, paper currencies, and paper financial instruments has allowed electronic markets to grow and expand globally. Today, most stock exchanges and futures exchanges are electronic. Trading is now mostly 24/7 and in real-time globally.
2014 and after: The trend towards a global system of trade and finance has emerged and is now ubiquitous (globally). The global Internet (digitization and virtualization) has changed our communication system for now and the future. We now live with speed of light communication, smart phones, and electronic transmission of information. Our global society is becoming ‘cashless’ as the digital revolution grows exponentially and pervasively. World institutions are now ruling our planet. The primary players are: The International Monetary Fund, The World Bank, The World Trade Organization, The Federal Reserve Banking System, The Bank for International Settlements, The European Economic Community, The G-20 Nations, the Council of Foreign Relations, and the United Nations and its Global Subsidiaries. Where will this lead us and who will govern this planet of 7 billion going forward?
Who will/can Govern a planet of unique individuals who demand personal freedom and autonomy?
The above timeline should reveal what has happened over the years. It is now obvious that our historical System of Capitalism is inadequate for the future of a global community of 7 billion citizens, our inter-dependent society, and our inter-connected world of real-time communication and relationships. One global village is a reality today! Speed of light communication is a reality today! Fighting over needed natural resources can not work in today’s inter-connected/real-time world. The philosophy of the most dominant Super Power (the USA) has been the philosophy of ‘Might makes Right’. This philosophy is unlikely to work going forward! Now may be a good time to inform our leaders of these realities! Guns and Might can not work when the average citizen has access to real-time information. Wisdom is needed going forward!
I am: http://kingdomecon.wordpress.com/
To understand our markets today we need to think differently. Today, our ‘prices’ are virtual (metaphysical) and our ‘wealth’ is physical (material). To discern what is happening we need to understand the philosophy of Dualism (two realms of reality). We live within TWO realms of reality and most seem unaware of this situation. My ‘consciousness’ is one realm and that which I observe (outside my consciousness) is the other realm. We can think of these TWO realms as opposites. That which ‘exists’ and is outside my consciousness is part of what Science studies (the empirical universe). That which does not exist and which is part of my inner realm (consciousness) is imaginary (non-physical) and needs to be viewed as Metaphysical. Who understands? Let’s dwell deeper into this issue!
Dualism is part of our monetary and economic thinking! Value and Prices are examples of the philosophy of Dualism!
Historically, ‘wealth’ is that which derives from our physical planet (our natural resources). Wealth includes items like oil, coal, iron, copper, uranium, nickel, lumber, grains, cotton, vegetables, apparel, domestic animals, leather, plastics, concrete, asphalt, and all the goods which get produced from these raw materials. In other words, ‘wealth’ is material/physical and we accumulate these items of wealth for our economy and our lifestyle. My house and car are examples of material wealth which we all need and desire. The purpose of economics is to PRODUCE ‘wealth’. Under our system of Capitalism, however, we distribute ‘wealth’ via a monetary system or regime. Money is the catalyst for creating and distributing ‘wealth’.
After material ‘wealth’ is produced we enter the area called the ‘marketplace’. Within the marketplace we encounter the concepts of ‘value’, ‘money’, ‘currency’, and ‘prices’. All these concepts are metaphysical and derived from our MINDS (also called our consciousness). Our ‘words’ and ‘thoughts’ derive from our CONSCIOUSNESS. We are now within the REALM of the non-physical. Capitalism is based on a belief system (much like a religion) which needs to be understood and digested. Today, let’s think about the concepts of ‘value’ and ‘prices’. VALUE is a concept which emerges in the marketplace when we exchange goods between counterparties. VALUE is subjective and imaginary! There is no such ‘thing’ as VALUE in our outer universe (that which science studies). Keep this reality in your focus!
The concept of VALUE leads to the concept of a STANDARD of VALUE. In time a ‘standard’ of value leads to some item which we select as MONEY. Money then leads to the concept of a CURRENCY (to calculate value). A currency then leads to VALUATION of goods and services within our marketplace. Valuation then leads to PRICES for goods being exchanged and distributed within our marketplace. So what are PRICES today? Why are PRICES decoupling from material WEALTH? One example which illustrates this phenomena is when we think about the PRICE of our personal car or house. How are these PRICES derived and determined in today’s marketplace?
Today, PRICES are derived! What does this mean? We derive PRICES from our CONSCIOUSNESS! Prices do not EXIST as physical items. Prices are derived and then ‘placed’ on items which we sell or exchange. Prices are SUBJECTIVE! Today, PRICES are derived as VIRTUAL numbers within the computer screen. What do we mean by the term VIRTUAL? Virtual means the same as ‘IMAGINARY’. That which is ‘imaginary’ is not physical or material! Look at your computer screen (right now). The words and images which you SEE (in your computer screen) are ‘imaginary’ units of CONSCIOUSNESS. I can not HOLD these images and/or words in my HAND. This means that they are CLOSED to my control and my possession! Let’s continue.
Prices are derived from Consciousness! There are NO objective prices today!
Today, PRICES are created within the VIRTUAL realm of reality (our inner realm of consciousness). We no longer use physical MONEY (silver/gold) to derive prices. Today, we derive PRICES from our THINKING! We THINK up a price and then apply a NUMBER (a currency) to the material GOOD that is being priced. In other words, PRICES are derived from our INNER realm of reality (our Consciousness). Since our currency unit today (our dollar) is metaphysical, all PRICES are also metaphysical. Do you discern this DUALITY? Can you discern that we LIVE within TWO realms of reality? Realm #1 is that which we call the MATERIAL and realm #2 is that which we can call the METAPHYSICAL. A car is physical. My house is physical. But the PRICE of my car/house is metaphysical! Note the difference!
House prices are subjective/emotional/derived! Think of VIRTUAL prices changing within our computer screen! Think of ‘value’ as an inner concept of your consciousness!
Today, our entire world economy is mostly within the COMPUTER SCREEN. We do not have any real MONEY today (silver/gold). What we experience are CURRENCIES (created from consciousness) by our banking cartel. Our credit cards are examples of metaphysical currencies. Our on-line checking and savings accounts are examples of metaphysical currencies. Our IRA and Investment Accounts (our so-called money market accounts) are examples of metaphysical currencies. All the stock market numbers are metaphysical derivations from our metaphysical currencies. Some 96% of all monetary transactions are now metaphysical transactions (within our consciousness). Who is AWARE of what has emerged in recent years? Who understands the internet, digitization, computerization, and information technology?
Think of bits/bytes (ones/zeros) as units of information derived from our INNER consciousness!
Today, I witness a gradual DECOUPLING of our ‘prices’ from our material ‘wealth’. I can witness this reality when I go outside and LOOK at my HOUSE. Where is the VALUE of my house? What is VALUE? It’s all within my MIND (also called my CONSCIOUSNESS). There is no real VALUE or PRICE that is stable/objective today! All is subjective/changing and volatile! Prices should be viewed as decoupled from material reality. We live within a Casino Economy which changes with the emotions of traders, speculators, and investors in real-time (and 24/7). The PRICE of my house will change with the emotions within the greater global marketplace. Central Banks are key to ‘price’ stability! And Central Banks and all banking are now VIRTUAL and within our computer screens. Who understands?
Photon pulses of light now send our invisible currencies from computer to computer in real-time (24/7)!
Digital Dualism creates our PRICES today! All is within the Computer Screen!
Take the time to think about the philosophy of DUALISM. I would suggest that DUALISM is the reality of the marketplace today! We live within TWO realms of reality! Our planet and the people on our planet our real and material. Our Consciousness, however, is a completely different reality! We now need to differentiate these TWO realms of reality. Economics and monetary affairs are understood via the philosophy of DUALISM. Give this issue some serious consideration at your leisure. Enjoy! I am: http://kingdomecon.wordpress.com/
What a world we live in today! We now have some 7 billion human beings occupying space on our planet. There are now some 200 countries attempting to survive on our planet. And some 5 billion person’s now have mobile phones of some type. We can now communicate with practically anyone on our planet (in real-time) irrespective of location on the planet. I can call from the U.S.A. to China and vice versa in real-time and 24/7. Our vast communication technology and our global internet has allowed this new dimension to occur. This reality (our global internet) has also allowed investors, traders, lenders, savers, and speculators to transact financial deals internationally and 24/7. Let’s think about some of the implications which our new global financial system has created for all of us!
Our New World of Global Communication and Global Financial Markets!
I read in yesterday’s Wall Street Journal that investors are now planning to connect all the major stock exchanges in North America via a new laser technology which will allow traders near speed of light transactions between the connected exchanges. Speed is important to traders now that computers and algorithms are the tools used to trade most types of financial securities. The trend in motion is to get as near to the speed of light as possible. Our fiber optic cables have created speeds that approach the speed of light but the new laser technology is touted as an even a faster process. This means that traders can trade on all the connected exchanges at the same time using multiple trading strategies and in real-time. What a world this has become.
New Laser Technology to connect stock exchanges for faster execution of trading strategies!
Today, our ‘money’ consists of bits/bytes of digits which ‘flow’ from computer to computer and appear as images within our computer screens. Historical money which was physical in nature (paper and coins) is being rapidly replaced with a digital economy and a cashless society. The new term within trading is: ’money flows’. Money (really imaginary digits) ‘flows’ via photon frequencies from sender to receiver with the click of a computer mouse. Central banks can now create these imaginary digits by merely ‘typing’ digits into the computer screen. Yesterday, I asked American Express for an increase in my credit card limit. I made a call to customer service and within 15 minutes I had my credit limit increased. How could this happen?
All that is necessary today is for the banking authorities to ‘type’ into the computer the dollar increase for my new credit limit. It’s all so easy and my ‘money’ (now new digits to spend) appears in my account within 15 minutes from the time of my call. I now can ‘spend’ new money up to my limit for whatever I choose. This same process is used by our Central banks as they increase ‘money’ flows within our economy. The process of QE is merely a ‘typing’ of digits into the official Fed account (called the SOMA) and then purchases can be made by the Fed for whatever ‘assets’ they desire to purchase. All Central banks and most commercial banks can now create digits (which we call dollars, euros, yen, pounds, etc.) from their authority (given to them by our fractional reserve banking rules).
Money derives from Consciousness and then gets ‘typed’ into the Computer screen!
Money appears like a heavenly gift to those who are connected to/with the select Authorities which ‘type’ in the digits. The well-connected and the elite borrowers can now receive digital ‘money’ via transfers from the banking sources at near zero interest rates. What a great game for the well-connected and for those who receive first crack at the new digits. Today, our ‘money’ is imaginary and derives from the CONSCIOUSNESS of select banking AUTHORITIES. Those with inside knowledge and political heft can usually obtain their digits for whatever purpose they might desire. Is any of this new technology and the digital ‘money’ flows leading to a more fair and prosperous world for the average working slave on this planet? What about all the favoritism which the select elites receive under this centralized ‘money’ system?
Why don’t we ask where all this imaginary ‘money’ and debt is leading? Yesterday, our elected representatives increased the Debt Ceiling for our National Government for another year. Our National Debt is now some $17.3 trillion and there is no plan to reduce this debt. Our Public Debt is now over $22 trillion and our Private Debt (when added to the Public debt) means that we have over $60 trillion to repay. If we want to add the entitlements to this number we get over $200 trillion of additional debt. And if we add the Derivative obligations we can not count the total. So can we continue this Debt and Deficit game indefinitely? Is there a tipping point to all this Debt? When could this tipping point arrive?
As long as the greater market participants remain CONFIDENT and positive (with ignorance of any consequences) then the GAME could continue for a while. My sense is that this game of confidence will not change much until some ‘black swan’ event hits the markets with a game changer. What might some of these game changers be? WAR might be one option. If a major WAR were to develop in the Middle East this could bring all the major political players into the picture. This could be a major game changer in 2014-15. Another game changer might be a major ‘run’ on a major International Banking Institution. We could witness this type of event within any of a number of emerging countries. Argentina, Brazil, Turkey, Italy, Spain, Portugal, or even the USA or England could create this type of event. What else might create this ‘Black Swan’ event…leading to a major change in market psychology?
A country like China could upset everyone in the West with a new demand for a NEW GLOBAL RESERVE CURRENCY (to replace the dollar). As surplus exporting countries recognize the unfairness of the Dollar standard and the advantages which it provides the U.S. consumer, they may refuse to export their products to us without some assurance of a fair trade value. This type of thinking is now ubiquitous within many Asian countries and the new policy of ‘tapering’ by our Fed may set off even more angst within the emerging markets. These types of issues are unlikely to disappear in 2014-15 and the growing demand for change may reach a crescendo soon. Now may be a great opportunity to get yourself educated on all the changes which have recently occurred. At some point we will need to restructure our global economic system!
Following are a few websites which you might find interesting and educational going forward. Check them out and keep current on events happening on the World Stage. Enjoy! I am: http://kingdomecon.wordpress.com/
1. http://wallstreetonparade.com/ (great site for events happening on Wall Street)
2. http://dollarcollapse.com/ (great site for potential collapse of the dollar)
3. http://www.globalgovernance.eu/ (great site for what Europe is thinking)
4. http://www.globalgovernancewatch.org/ (great site for new developments in Global Governance)
5. http://www.forcingchange.org/one_world_one_money_with_endnotes (the logic of a Global Currency)
6. http://www.brookings.edu/research/topics/global-governance (forum for Select Elites who desire change)
7. http://www.ft.com/intl/cms/s/0/7851925a-17a2-11de-8c9d-0000779fd2ac.html#axzz2tFBb47fz (China calls for New World Reserve Currency)
Report from California Investment Conference, February 7-8, 2014:
A small group of investors and followers attended the above conference in Indian Wells, Ca. Some 200 were in attendance and I found the following reports meaningful:
Michael A. Berry (Discovery Investing): Serious deflation on the horizon. Debt kills growth. The M-1 money multiplier continues down. Velocity of money the problem. There is no way out of the Keynesian liquidity trap.
Gregory T. Weldon (Weldon Financial): Deflation crisis coming. Bernanke’s reflation amounted to some $22 trillion. It didn’t work. Home prices now in deflation mode.
Mike Maloney (GoldSilver.com): Big deflation within next 2-3 years. We could get hyper-inflation after deflation. Our Fed is a major problem for freedom and growth (http://www.freetheworld.com/index.php).